We’ve all heard the saying that money can’t buy happiness — but how true is that, really? In fact, research shows that people who have more money tend to be happier, though this association hasn’t been proven at the upper end of the economic spectrum, like with those earning above $500,000 a year. New research from Wharton senior fellow Matthew Killingsworth sheds some light on this, suggesting that happiness continues to rise with income — even beyond the half-million-dollar mark.
If there’s a point where money stops making a difference, Killingsworth said, it’s probably much higher than we previously thought…
While there’s plenty of research on money and happiness, most studies haven’t looked at people earning high incomes…
Another key finding in the study is that the happiness gap between wealthy people and middle-income earners is much larger than the gap between middle- and low-income earners. For example, people earning $70,000 to $80,000 a year are a lot closer in happiness to those with low incomes than they are to the ultra-wealthy. In fact, the jump in happiness for the wealthy compared to middle-income earners is nearly three times as large as the difference between middle- and low-income groups.
The “bigger fool” theory in the real world. As long as the wealthy will pay the $$$ price, AND think it was “fun”, there is no limit. Not even a trip to space–which is only $250k?
Is this another aspect of the famous wealth effect?
They are forever telling us wealth effect is a driver of the economy. When investments do well consumers have more money to spend.
Does wealth effect also mean more happiness? It must be much better than the alternative. When stocks crash we don’t see them jumping out of windows. But we probably do see fewer smiles.
Depends how you define “happiness”. Note big difference between older and younger generations. Younger people want “experiences”, not so much “things”. And their spending shows that difference.
Amen. When my stack got big enough to retire, I was one happy guy. Coworkers said “oh, you’ll miss working”. I said “miss getting up before dawn, and slogging through a snowstorm, so people can yip at me all day?”
